question
Which of the following reduces the potential for sustainable long run industry profits?
answer
Entry
question
Opportunity cost differs from accounting cost because of?
answer
Implicit costs
question
Which of the following statements is most likely true regarding economic and accounting profits?
answer
Economic profits are generally less than explicit costs
question
If marginal cost equals marginal revenue at the current production level, the firm is?
answer
Maximizing profits
question
If firms in the pizza industry are earning positive economic profits, which of the following will most likely occur in the future?
answer
Additional firms will enter the market, economic profits of the firms in the industry already will begin to decline, and the market price for pizza will fall so ALL OF THE ABOVE
question
A good example of consumer-consumer rivalry is?
answer
The process of bidding in an auction
question
Which of the following is one of the five forces?
answer
Rivalry, Buyers Power, Sellers Power, so ALL OF THE ABOVE
question
Scarce resources are allocated towards the production of goods most valued by society because?
answer
Firms have an incentive to maximize profits
question
Maximizing the firms current profits is the same as maximizing the lifetime value of the firm when?
answer
Interest rate is larger than the growth rate in profits and both are constant.
question
A simultaneous increase in demand and supply will unambiguously?
answer
Raise the equilibrium quantity
question
An ad valorem tax placed on the sales of an item will?
answer
Make the supply curve steeper by rotating counterclockwise
question
When the government imposes a price ceiling above the market price, the result will be that?
answer
A price ceiling set above the equilibrium price will have NO EFFECT on the market equilibrium.
question
The law of supply indicates that as the price of a good decreases?
answer
Quantity that producers offer to the market will decrease
question
When an economist refers to a product as an inferior good, it implies that?
answer
Incomes rises, demand for that product will fall.
question
Compliment goods are ones in which?
answer
An increase in the price of one good leads to a decrease in the demand of the other good.
question
Graphically, a hurricane destroys 30% of the orange trees in Florida will cause the supply curve for oranges to?
answer
Shift leftward
question
Producer surplus is the difference between?
answer
Market price and the minimum price required to induce production
question
For a chemical manufacturer that emits some air pollution, if the Gov increased the restrictions on allowable emission levels, it would cause the supply curve of chemicals to?
answer
Shift to the left
question
Which of the following is most likely to shift the demand curve for electricity to the left?
answer
Consumers becoming more energy conscious.
question
If a decrease in the price of hot tea increases the demand for honey, that indicates that?
answer
The two goods are compliments
question
Consumer surplus is measured as the area?
answer
Below the demand curve and above the market price
question
Holding all else constant, as additional firms leave an industry?
answer
Less output is available at each given price
question
Which of the following provides an indication that an individual parameter estimate is significantly different from zero?
answer
T-statistic
question
Suppose the demand for a product is Q= 4 - 2P. The demand for this product is?
answer
Elastic
question
Given a log-linear demand curve, we know that?
answer
The elasticity is constant at all prices
question
The ratio of the value of a parameter estimate to the standard error of a parameter estimate is known as?
answer
T-statistic
question
If the own price elasticity of demand is equal to zero, then?
answer
Consumers do not respond at all to changes in price
question
The demand for Adidas brand shoes is?
answer
More elastic than the demand for shoes in general.
question
Assume that the price elasticity is -3.5 for a certain firm's product. If the firm increases prices, the firm's managers can expect total revenue to?
answer
Decrease
question
Which of the following is a correct statement about the own-price elasticity of demand?
answer
Demand tends to be more inelastic for goods that compromise a smaller share of a consumers budget
question
As a general rule of thumb, a manager can be 95% confident that the true value of the underlying parameter in the regression is not zero, when the absolute value of the?
answer
T-statistic is greater than or equal to two.
question
An increase in the price of good Y will have what effect on the budget line on a normal X-Y graph?
answer
Decrease the vertical intercept
question
For a consumer equilibrium to occur, the?
answer
Market rate of substitution has to be equal to the marginal rate of substitution
question
Which of the following defies combinations of two or more goods that give a consumer the same level of satisfaction?
answer
Indifference curve
question
What will happen to the budget line, if the price of good Y decreases?
answer
It will become steeper
question
Given an increase in the price of good X, the substitution effect isolates the consumer response to be?
answer
Higher market rate of substitution
question
The difference between a change in price and a change in income is that?
answer
Change in income does not affect the slope of the budget line while a change in price does change the slope.
question
Which property implies that consumers are capable of expressing a preference for, or indifference among all bundles of goods?
answer
Completeness
question
Jill prefers apples to oranges, oranges to bananas, and bananas to apples. Jill's preferences?
answer
Are not transitive
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